Thanks for reporting back on this topic.First, I would check to make sure that your Customer did not register under a different email address. Often times, a Customer will use a special email address at PayPal, but register a Username on your site under their own personal address. You can cross-reference this using the Paid Subscr. ID. Look through your list of Users in WordPress® to see if the Customer actually registered or not.
Generally speaking, if a Customer pays you, they don't abandon the registration form. They'll also get an email after checkout with full instructions. I normally don't bother with this unless a Customer submits a support ticket for assistance ( i.e. they've had a problem somewhere ).Now, to answer your question.If I add them manually will S2 member recognize the email as a customer and "make things right" or will I need to intervene there also?
No. You'll need to create their account manually in this case, and you'll need to enter all of the details yourself, including the Paid Subscr. ID. You can do this from your Dashboard:
Users -> Add New.
You'll find the Paid Subscr. ID in your Transaction log at PayPal.